What Is Per Diem? What the 2027 Rate Buys in 89 U.S. Cities

Per diem is the daily amount the federal government allows for lodging, meals and incidental expenses on work travel. Lodging is repaid at cost up to a nightly cap, and meals and incidentals are a flat daily amount. The government's table covers the 48 contiguous states and Washington, D.C., and many companies use it for their own employees.

How does per diem work?

The U.S. General Services Administration sets the rates each fiscal year, which starts October 1. Every county gets a lodging cap and a meals and incidentals rate, known as M&IE. Most of the country uses the standard rate, $113 a night for lodging and $68 a day for M&IE in FY2027. GSA lists 295 destinations with higher rates, and in 149 of them the lodging cap changes by month with the local season.

Lodging is reimbursed at what the room cost, up to the cap, with a receipt. M&IE is paid as a flat amount with no receipts, and the first and last day of a trip pay 75% of it. The M&IE rate runs from $68 to $92 depending on the destination.

Federal employees have to follow the table. Private companies do not, but many use it because the IRS treats per diem paid at or below the federal rate under an accountable plan as a reimbursement, not taxable income. More on that in Is per diem taxable?

What hotel does the 2027 rate buy?

This analysis looks only at lodging, the nightly per diem cap for a hotel room, and leaves out meals and incidentals. The FY2027 rates took effect October 1, 2026, and the standard lodging cap rose from $110 to $113 a night. Whether that cap covers a hotel room depends on the city and the month, and some cities stretch it a long way. In Aurora, Colorado, 96% of hotel rates shown in Engine searches fit under the new cap. In Arlington, Texas, the cap covers a 4-star hotel.

New York and Boston have the two highest caps of the 89 cities in Engine's analysis, $291 and $284 a night on average. However, both rank near the bottom on how many hotel rates fit under the cap. Across the year, 38% of rates fit in New York and 44% in Boston. Chicago, with a $202 cap, fits 38%. Dallas gets $184 and fits 72%, enough to cover 3.5-star hotels.

Engine, a business travel platform used by more than 39,000 companies, analyzed every hotel rate shown in its searches for check-ins from October 2025 through September 2026 and compared each one with the new lodging cap for that hotel's county and month.

Where does the per diem go furthest?

Six of the top 10 cities share a cap with a larger neighbor. Aurora gets the same $203 cap as Denver, and 96% of Aurora's hotel rates fit under it, compared with 67% in Denver. Irving gets Dallas's $184 cap and fits 85% of rates. A traveler who can stay a few miles out gets more hotel for the same per diem.

Where does the per diem fall shortest?

In Boston, 94% of 2-star rates fit under the cap, but only 53% of 3-star rates do. Chicago is similar, with 83% of 2-star rates and 51% of 3-star rates under its cap. New York has the highest cap in the country and fits 38% of its rates. "None" means no hotel class fit under the cap often enough to count; the notes at the end explain each case.

Which months does the cap fall furthest behind?

In 47 of the 89 cities, the typical hotel rate in at least one month was higher than that month's cap. These four cities had the widest gap.

The same cities cover most rates in the off-season. In January, Boston's cap is $213, the typical rate is $144, and 78% of rates fit under it. Chicago fits about three-quarters of its rates in November and January.

Why doesn't a bigger per diem buy a better hotel?

GSA sets each cap at 5% below the average rate at mid-range hotels in the area, using data from the previous April through March. Upscale and luxury hotels are left out of that average, so in a city full of them, the cap covers the cheaper end of the market.

The cap also changes by month in 149 destinations. New York's runs from $189 in January and February to $358 from September through December. Boston's runs from $213 to $365.

Is the $113 standard rate enough?

Fourteen of the 89 cities have no GSA rate of their own and get the $113 standard rate. None of them covers anything above a 2.5-star hotel. Frisco, a Dallas suburb, fits only 32% of its hotel rates under $113, while Dallas itself gets $184. Jacksonville and Richmond fit about half of their hotel rates.

What are the options when hotel rates exceed the cap?

Check the month first. In New York and Boston, the cap swings by more than $150 a night across the year, so the same trip can fit under it in one month and not the next. Then check the suburbs, since a town a few miles out often shares the big city's cap with cheaper hotels. In most of the 89 cities, the cap covers 2.5-star or 3-star hotels, so that is the class to search. Federal travelers can be reimbursed for actual expenses up to 300% of the per diem rate with agency approval. Company policies vary.

To see the cap for any city, ZIP code or month, and the hotel class it covers, use Engine's per diem rates lookup.

How we did this

We used GSA's FY2027 lodging rates by county and month, effective October 1, 2026. Counties with no named destination use the $113 standard rate. The hotel data includes every rate shown in Engine searches for check-ins from October 2025 through September 2026. Rates include fees paid at the hotel and exclude taxes because GSA counts mandatory fees against the cap. A typical rate is the median rate shown in searches for that city and check-in month, compared with the FY2027 cap for the same month. Hotel rates are from the past year; the caps are the ones in effect now.

We counted a hotel class as covered when at least 70% of its rates came in under the cap and every lower class did too. "None" means no class qualified. In Pittsburgh, 2-star rates fell just short at 69.9% while 2.5-star rates cleared the mark. Detroit had too few rates below 3.5-star to judge those classes. Buffalo had too few 2-star rates, and its 2.5-star rates missed the mark.

We started with the 100 largest U.S. cities by Census Bureau estimates, then excluded Anchorage and Honolulu, which use separate federal tables, and nine cities where Engine customers booked fewer than 20 hotels. A city includes hotels with that city in their address, so Irving and Frisco count separately from Dallas.